Tuesday 24 October 2023

Invest, save or spend? Cash or crypto? Stick to the budget.. or ‘live for the moment’? In a cost of living crisis, managing money has never seemed more bewildering. But what to teach our kids…and when?

That’s what I’m challenged to think about in the ‘Money Matters’ talk at the Ilkley Literature Festival this weekend. The engaging speakers, from the Bank of England and the Financial Times, know their stuff and breathe life into what could have been a very dry hour.

Both are passionate about having financial education on the school curricula, which I am happy to report is already in place, usually delivered during personal development lessons. And there are some terrific projects out there; at my place of work, these have been so popular that annual feedback from pupils consistently asks for more input in this area.

The growth of creative ideas to interest pupils in thinking about economics is most welcome. Rishi Sunak may think that school is the place enable teenagers to “feel confident” with …. things like mortgage deals. More experienced educators however, who in previous years were tasked with dragging a room of 14 year-olds through a grim hour of ‘fixed rate’ or ‘interest only’ deals for first time buyers, would argue that this suggestion misses the most valuable of marks. If you want school children to listen… make it relevant!

And the financial gurus in Ilkey chime fervently with this. Of course, teach about saving and borrowing; with money in short supply, the temptation to ‘buy now and pay later’ is a real danger for young people. But (and it is a big BUT) do it in relation to something that pupils are interested in. As an example, the experts addressing the Ilkey gathering, tell us that, for one teacher in Wales this was Hair Extensions; Nicola Buter’s innovate lesson, addressing the complex world of finance, loans and interest, winning her the Interactive Investor Personal Finance Teacher of the Year Award.

A quick google search also yields a wealth of advice on financial first steps for toddlers and teenagers. Of course Martin Lewis is there. As early as 2007, his Teen Cash Class, promoted the use of key mantras when working with young people to break the ‘impulse buying cycle’. To be honest it is useful for anyone! When contemplating a spur of the moment buy, ask yourself,

Do I need it?

Can I afford it?

Can I get it cheaper somewhere else

The conclusion to this chapter is particularly thought-provoking and I’ll certainly be both internalising it … as well as sharing it with my offspring,

‘If I were able to give you back all the money you’ve ever spent buying things on impulse,
would you take the cash and hand over the stuff?’

Of course we would!

With most spending now migrating online, Lewis’ site also promotes the free guide from Internet Matters, Online money management tips to support young people.

There is guidance for younger children too, for whom finance usually means small amounts of pocket money. Barclays Bank, as one example among many, have designed a nice set of pocket money activities called ‘How to teach your child about money’

So engaging, fun and time-relevant for our children? Is that problem solved? Alas no, there is a snag! At some point, many will have to grapple with mortages, debts, pensions and bills. Some may be in a position to think of investments too. So when do we teach them about this? And, being honest, how many of us would actually feel equipped to do so?

For me, adult education is no different to that of school children; it needs to be relevant. Otherwise, finance can simply be a huge bore. So any advice is best received when it is needed. Hence, in many situations, that means after leaving school. So who do adults turn to?

‘Martin Lewis‘ I hear you cry, and, absolutely – the man is amazing! We could also read books and try to wade through the financial newspapers. However, can we do better than this? Many of these topics are complex and would benefit from a more interactive delivery and discussion. So here’s my question. On this most grown-up of issues, could and should FE/HE providers and employers make that contribution to our financial education?

Can companies deliver impartial training on pensions for all new employees? Should potential first time buyers be mandated to complete a free course, designed by the lenders, on managing a mortgage, looking at tips such as ‘over-payment’ to reduce the debt? How much guidance can we expect from universities about living on a student loan? How about challenging the DWP to design lessons on ‘surviving on benefits‘ or ‘escaping the poverty trap‘? And as for crypto …!

Questions questions questions! I set out in this this post to explore when to tell our kids about money matters. Isn’t the truth that in an ever-changing world, our leaders also need to think about what and when to tell all of us about this most important of areas?

Improved financial literacy cannot all be addressed with a couple more years of mathematics on the school curriculum. Additionally, some guidance would be more engaging to people now at a stage in life when the information is pertinent. Surely some well thought out work-based education be the best place for input? It could reduce financial stress, contribute to a more prosperous society … hey, we could even educate our children better. Wouldn’t that be a win for everyone?